2018 Capital Expenditure Forecast for Semiconductor Industry Exceeds $100 Billion for the First Time

[In 2018, the capital expenditures of the semiconductor industry exceeded US$100 billion for the first time] ICInsights raised its forecast for full-year semiconductor spending growth this year to 14% from 8%.

ICInsights recently released its updated McClean report for May 2018. The update includes the first quarter of the first quarter of semiconductor suppliers, the first quarter of 2018 the discussion of the results of the integrated circuit industry market and the company's 2018 capital expenditures update.

In general, the actual results of capital expenditures in 2018 are more positive than those predicted by IC Insights, which can be seen in the updated Macleanian Report 2018 (MR18) in March. ICInsights predicts that capital expenditure in the semiconductor industry will increase by 8% this year. However, as shown in Figure 1, ICInsights has raised its forecast for capital expenditure in 2018 by 6 percentage points to a 14% increase. If such growth does occur, it will be the first time that capital expenditures in the semiconductor industry have exceeded 100 billion U.S. dollars. Global 2018 capital expenditure forecast data is 53% higher than 2016 data.

Although Samsung stated that it has not had a full-year capital expenditure forecast this year, it does indicate that the expenditure of semiconductor capital expenditures in 2018 is “less” compared to 2017, with a specific cost of US$24.2 billion. However, with its capital spending in the first quarter of 2018, Samsung spent $67.2 million in capital expenditures for its semiconductor sector, slightly higher than the average of the first three quarters. This figure is almost four times the amount spent in the first quarter of 2016! In the past four quarters, Samsung spent $26.6 billion in capital expenditures for its semiconductor group.

ICInsights estimates that the capital expenditure of Samsung Semiconductor Group will reach US$20 billion this year, a decrease of US$4.2 billion from 2017. However, given the strong start of spending this year, there currently appears to be greater downside potential.

Since the DRAM and NAND flash memory markets are still very strong, SK hynix’s capital expenditure is expected to increase to 11.5 billion U.S. dollars this year, a 42% increase from the 8.1 billion U.S. dollars in 2017. The increase in SK hynix's spending this year will focus on the launch of two large-scale memory factories M15, a 3D NAND flash memory manufacturing facility in Cheongju, South Korea, and expansion of its huge DRAM plant in Wuxi, China. The Cheongju factory will be open before the end of this year, and the Wuxi fab will also be planned to open before the end of this year, a few months earlier than originally scheduled for the start of 2019.

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